Two giants of the stock image industry, Getty Images and Shutterstock, are merging to create a $3.7 billion powerhouse built for the age of artificial intelligence.
According to a report by Reuters on Tuesday, the announcement regarding the merger of Getty Images and Shutterstock will attract scrutiny by regulators with anti-trust concerns.
The deal comes as the stock photography industry is under pressure from AI tools like Midjourney and OpenAI’s DALL-E. On these platforms, users can make images and videos instantly by only inputting simple text prompts, which is a challenge for traditional content providers.
According to the agreement, Shutterstock’s shareholders will have three options available to them. Shutterstock shareholders can get $28.80 cash per share, 13.67 Getty shares, or 9.17 Getty shares plus $9.50 in cash per stock share. Shutterstock’s stock jumped 26.5% in premarket trading after the announcement, while Getty’s rose 50.2%.
The combined company will be named Getty Images Holdings
In the past four years, both companies have struggled as smartphones and mobile cameras have diminished the need for stock photography. The merger is viewed as a strategy that allows for the tackling of those challenges and the adaptation to a rapidly evolving market of products backed by artificial intelligence.
As per the deal, the combined company will be named Getty Images Holdings. Craig Peters, currently CEO of Getty Images, will continue to hold that position. Shutterstock investors and Getty shareholders will have the remaining 54.7% of shares. Peters said the merger would improve “content offerings, expanding event coverage and delivering new technologies.”
By its third year, the combined company expects to save $150 million to $200 million a year. It will remain on the New York Stock Exchange, with a ticker symbol of ‘GETY.’
Getty also competes with major players such as Reuters and the Associated Press for visual media for news and other uses, as well as editorial and commercial content.
The landmark deal aims to change the visual content, especially as it reinvents the companies’ positions in an AI-driven world.
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